Specialties continue to absorb liability cost increases

From 2003 to 2004, multispecialty practices overall were squeezed by cost increases that exceeded revenue gains, according to results of a recently released cost survey from the Medical Group Management Association. Median total operating costs grew 1.3% (to $353,503) while total medical revenue dropped 0.7% (to $582,307). Multispecialty practices' margins grew only 1.7% to $236,021.

Hospital-owned multispecialty practices controlled costs better, while non-hospital-owned practices seem to be better revenue generators.

For single-specialty practices, median total medical revenue after operating costs per full-time-equivalent physician grew 5.6% to $387,341. All single-specialty practices' median total operating cost per physician increased a slight 0.9% to $374,211, while median total medical revenue dropped 0.8% to $739,574.

Professional liability coverage continues to increase at a consistent level for all specialties. Since 2003, every specialty except anesthesiology has seen professional liability costs per full-time-equivalent physician climb to between 13% and 19%, the survey showed.